NexPoint Residential Trust, Inc. Enters into Secured $250.0 Million Revolving and Term Credit Facility
July 01, 2021 at 04:17 pm EDT
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On June 30, 2021, NexPoint Residential Trust, Inc. entered into a secured $250.0 million revolving and term credit facility with Truist Bank (“Truist”), as administrative agent, and the lenders from time to time party thereto. Subject to conditions provided in the Credit Facility, the Credit Facility may be increased up to an additional $100.0 million at the company’s option if the lenders agree to increase their commitments. The Credit Facility will mature on June 30, 2024, unless the company exercises its option to voluntarily and permanently reduce all of the commitments before the maturity date or elects to exercise its right and option to extend the facility for a one-year term. The Credit Facility is guaranteed by the Company and the obligations under the Credit Facility are, subject to some exceptions, secured by a continuing security interest in substantially all of the assets of the company.
Advances under the Credit Facility accrue interest at a per annum rate equal to, at the company’s election, either LIBOR plus a margin of 1.90% to 2.40%, depending on the company’s total leverage ratio, or a base rate determined according to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50%, (c) LIBOR plus 1.0% or (d) 0.0% plus a margin of 0.90% to 1.40%, depending on the Company’s total leverage ratio.
An unused commitment fee at a rate of 0.15% or 0.25%, depending on the outstanding aggregate revolving commitments, applies to unutilized borrowing capacity under the Credit Facility. Amounts owing under the Credit Facility may be prepaid at any time without premium or penalty.
The Credit Facility contains representations and warranties, affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum total leverage ratio and a minimum fixed charge coverage ratio. If an event of default occurs, the lenders may terminate the commitments under the Credit Facility and require the immediate repayment of all outstanding borrowings and the cash collateralization of all outstanding letters of credit under the Credit Facility.
NexPoint Residential Trust, Inc. is a real estate investment trust (REIT). The Company is primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with value-add potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. The Companyâs investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. The Company may allocate up to 30% of the portfolio to investments in real estate-related debt and securities with the potential for high current income or total returns. These allocations may include first and second mortgages and subordinated, bridge, mezzanine, construction and other loans. It is externally managed by NexPoint Real Estate Advisors, L.P.